Bonuses

The French government Wednesday proposed a hefty tax on bankers' bonuses similar to one instituted in Britain to discourage rewards for a sector that now relies heavily on public funds to stay afloat. Finance Minister Christine Lagarde unveiled a onetime 50% levy on any bankers' bonuses exceeding about $40,000. The tax, on reward payments made in 2010, would be paid by the employers rather than the bonus recipients. Lagarde's announcement, a week after the British government put forward an almost identical tax scheme, was widely expected.

Lloyd Blankfein, the chief executive of Goldman Sachs Group Inc., has finally acknowledged that his company "participated in things that were clearly wrong." Evidently he's referring to the collapse of the U.S. economy, which has wiped out savings, pushed thousands into bankruptcy and left the country with a double-digit unemployment rate. As an act of contrition, Goldman Sachs will give $100 million during each of the next five years to help small businesses. Because the company has set aside more than $10 billion in employee bonuses for this year alone, paltry would seem a flattering description for the offer.

Bonuses for Wall Street traders and investment bankers should rise 5% to 10% for a third straight year, according to a survey released Tuesday by compensation consultant Johnson Associates Inc. Banks have benefited from increased merger activity, growth in prime brokerages as hedge funds proliferate, and a surge in trading profits despite a slow second quarter.

Microsoft Corp. said Wednesday that it cut bonuses paid to Chairman Bill Gates and Chief Executive Steve Ballmer as profit growth slowed in three of the last four quarters. Gates and Ballmer each earned $616,667 in salary in the fiscal year ended in June, up 2.8% from a year earlier. Both had their bonuses cut 13% to $350,000, Microsoft said in a regulatory filing. It was the first cut in total salary and bonus for Gates since 1998 and the first for Ballmer since 2000.

Harvard University's treasurer Thursday defended an "extraordinary" $101-million payout in fiscal 2003 to the school's top five money managers, calling it a fortunate problem. "We should remember ... that we are -- in a very real sense -- fortunate to have to confront this problem," Harvard Treasurer Ronald Daniel wrote in a letter to alumni. "The extraordinary bonuses in question would not exist if not for extraordinary investment performance."

Time Warner Inc. gave even bigger bonuses to Chairman Gerald Levin and Vice Chairman Ted Turner to reward them for the media and entertainment company's success last year, according to documents filed Wednesday. Levin's bonus jumped to $6.5 million from $4 million in 1996 as New York-based Time Warner recorded its first annual profit since the company was formed in 1989. Turner, in his first full year as vice chairman, saw his bonus leap to $5 million from $1 million in 1996.

Executives at Lions Gate Entertainment Corp. received significantly increased bonuses in the last fiscal year, following the Santa Monica studio's successful launch of "The Hunger Games," its acquisition of Summit Entertainment and a more than 100% rise in its stock price. Details on the compensation of top executives at Lions Gate were disclosed in the company's proxy filing with the Securities and Exchange Commission before its annual meeting, which will be held Sept. 11 in Toronto.

Wall Street executives aren't famous for their humility, but they reached a new level of tone-deaf hubris in their recovery from the collapse of 2008. A number of top banks and investment firms have racked up outsized profits in recent months, sending their bonus checks through the roof. Goldman Sachs, for example, set aside $16.7 billion billion for employee compensation -- and that's just for the first nine months of 2009. This despite the fact that many of the same companies were in danger of going under just a year and a half ago, only to be rescued by federal bailout dollars and extraordinarily generous credit terms from the Federal Reserve.

Hostess Brands Inc., in the midst of winding down its business, is hoping Thursday that a federal bankruptcy judge approves up to $1.75 million in bonuses for its executives. The money is intended as an incentive for 19 top-level managers to stay on with the Twinkies and Ding Dongs maker to oversee its liquidation following a battle with its second-largest union. The payouts will be granted only if managers “achieve a set of specific tasks and goals within a specified time frame that are designed to speed and lower the cost of the wind-down,” said Hostess spokesman Lance Ignon.

Teachers, librarians, counselors and administrators who retire from the William S. Hart Union High School District this year are eligible for a bonus critics say is now ineffective at promoting early retirement. The district's board of trustees on Wednesday night approved the Golden Handshake program, which some district leaders wanted to drop for 1993.